Montecito Water District Authorizes Preliminary Agreement to Sell State Water Rights

Santa Barbara Santa Maria San Luis Obispo, CA, September 29, 2026 —

The Montecito Water District has taken a significant step toward potentially altering its water supply portfolio, authorizing a preliminary agreement to sell approximately 40% of its State Water rights. The proposed transaction is with Solstra Communities California LLC, the entity developing the planned Solomon Hills housing project situated in North County.

This authorization marks the early stages of what could be a transformative deal for the district. The primary objectives outlined for this sale include bolstering the Montecito Water District’s local water supply capabilities. Furthermore, the district aims to diminish its dependence on the State Water Project, which is described as both costly and unreliable. The revenue generated from such a sale is intended to be reinvested into local water infrastructure projects, facilitating necessary upgrades and improvements within the district’s service area.

Details regarding the precise financial terms or the exact timeline for the transaction were not immediately available. The agreement is explicitly described as preliminary, indicating that it is subject to comprehensive further negotiations and the acquisition of all necessary approvals before it can be finalized. Both the Montecito Water District and Solstra Communities California LLC will likely engage in extensive due diligence and regulatory reviews as the process moves forward. The implications of this potential sale on regional water management and the development of the Solomon Hills project are expected to be a focal point in the coming months.

Story summarized from the original created by Evelyn Spence, South County Editor on www.noozhawk.com, see more information here.

Media gallery